Pete, it's already happened. The oil and gas commission in ND classifies after the fact that multiple formations are a common source of supply so even if a half barrel of oil migrates from one formation to another that is being produced then the undrilled formation is held by production also. The courts will not hear the case if the mineral owner wanted to sue because the courts say the NDIC created by the legislature who makes the laws is the appropriate entity to decide the issue. There need not be proof that any oil migrated from one formation to another either. The only way I have thought around it is to not mention the formations but to use xxx feet above the highest perforation and xxx feet below the lowest perforation, because if you mention formation you have already lost. In ND the mineral owners depth clause mentioning formations can be effectively voided for the asking. It would be hilarious if it weren't so sad. Some people had elaborate clauses specific to the different benches in a formation. Now they find out that everything from the lodgepole to the TF are held as a common source of supply by a single well in the Bakken.
Logically, if the operator has tapped everything with one well, they should never be allowed to drill another well in that spacing into different formations because it would be wasteful since they are producing everything already, right? It's just a swindle.
It sort of brings to mind the courts determination that cost free royalty means that the lessor does not have to pay for the drilling of the well, which is laughable because if you had to pay for the drilling anyway, why would anyone lease?
I am sure that lessors find it a relief that they need not pay for the well after already giving up 75% to 80% of the value of their oil in a lease but somehow I don't believe it makes them feel any better paying post production costs, when they thought they would not.
You know, if the original oil company still held the lease, I could agree that the lease should still be valid, but when this lease has been passed around to 8 different oil companies for 30 years+ and they can still use the original lease, with 1980's language, then something is wrong. All of these oil companies made money, and a lot of it, let's not forget that.
What makes you think the assignment of the original lease resembles the original lease? Somewhere along the way the assignment of the minerals could have been limited as to depths so the lessee who assigns your lease to someone else could retain deeper or shallower rights.
M Baxter said:
You know, if the original oil company still held the lease, I could agree that the lease should still be valid, but when this lease has been passed around to 8 different oil companies for 30 years+ and they can still use the original lease, with 1980's language, then something is wrong. All of these oil companies made money, and a lot of it, let's not forget that.
My entire lease (I think) has been sold three times and the Woodford has recently been sold to Continental.
Could I get a copy of the current lease if I request it from either Sheridan (the current lessee) orContinental?
Thanks
Gracie
r w kennedy said:
What makes you think the assignment of the original lease resembles the original lease? Somewhere along the way the assignment of the minerals could have been limited as to depths so the lessee who assigns your lease to someone else could retain deeper or shallower rights.
M Baxter said:
You know, if the original oil company still held the lease, I could agree that the lease should still be valid, but when this lease has been passed around to 8 different oil companies for 30 years+ and they can still use the original lease, with 1980's language, then something is wrong. All of these oil companies made money, and a lot of it, let's not forget that.
Gracie, I think it's usually faster and easier to get a copy of the lease from the recorders office if possible. If I wanted a copy of the original lease from a lessee, I would ask the original lessee because the assignee may not have a copy of the lease. I think the assignee should have a copy of the lease but I don't think there is any requirement that they do have a copy.
I think I am getting my lessor and leasee confused.
So I will find a copy of the assignment from Sheridan to Continental for the Woodford on file in Grady County Court Clerks office under my legal description? I am going to Chickasha and Just want to make sure I understand.
Yes, that is a big problem. There is no transparency. And, at the courthouse where I tried to look up all the recorded information on our land, there were over 400 pages of documents. And as noted above, printing all the information may not have yielded anything pertinent.